Deep Dive: A Primer on Mag7 (Part 1)

What drives the Mag7's revenues and bottom lines? How do they allocate capital, and are they positioned for continued outsized returns? How should we understand them in relation to the market overall?

The Mag7 businesses are the undisputed winners of the internet era, with a combined market capitalization of over $12T, accounting for around 35% of the S&P 500 and driving over 50% of the S&P 500’s gains from 2023–2024. However, this year, all seven of these companies mean reverted and are currently down around 10-20% so far this year. For many, this mean reversion has prompted a re-underwriting of their own portfolios, and for some who had been more allocated toward cash and bonds, it has prompted them to start buying in. We approached this deep dive to provide an essential and…